When Carol Bartz took over as Yahoo CEO, we estimated that she needed to fire 3,000 Yahoos to get the company into fighting shape.
We also worried that, instead of firing 3,000 people, Carol would cut far fewer–and thereby doom the company to future layoffs, terrible morale, and death-by-a-thousand cuts.
Carol took the latter course.
And based on the latest news–that Yahoo is planning to fire at least 10% of the company–it seems that that death-by-a-thousand-cuts is where the company is headed.
Beyond the fact that another 1,000 Yahoos will get canned, here’s what’s really depressing about this:
You can’t fire your way to prosperity.
What Yahoo needs to be doing right now is INVESTING in its products, not cutting back. And at first glance, firing a huge swathe of the product team “to meet financial goals” basically makes it seem like the company is giving up.
Yahoo’s revenue has stalled dead. The company’s technology has atrophied. Innovation has stopped. The top tech talent has long since moved on to Google, Facebook, and other companies. Yahoo needs to reverse these trends, and one way to begin to reverse them is to invest in the long-term future. Instead, Yahoo appears to be worried about meeting near-term cash-flow targets.
Now, if this cut is really just about eliminating the “lifers” and other dead wood in the product organisation, fine. Yahoo needs to work its way back to a culture of intensity and excellence, and canning people who don’t care about that is a good place to start.
If this move is about re-aligning the product team to focus on a few big opportunities, that’s OK, too. Yahoo has some huge opportunities, and it also has some crown jewels that it needs to defend (Yahoo Mail). But if this were a re-alignment, you’d expect to see an equal number of folks hired, or fewer let go in the first place.
If it’s about the money, meanwhile, Yahoo might as well just throw in the towel and sell out to private-equity right now.
Yes, Yahoo’s margins are way below where they should be. But if the money is being well-spent, that’s fine. A company in Yahoo’s position should not be focusing on “near-term cash flow.” It should be focused on investing for far larger future cash flows. By cutting such a huge chunk of the company, Yahoo basically seems to be saying “we have run out of ideas and don’t know else what to do.”
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